UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
April 20, 1998
Second National Financial Corporation
(Exact Name of Registrant as specified in its Charter)
<TABLE>
<S> <C>
Virginia 000-22747 54-1542438
(State or other jurisdiction (Commission File Number) (IRS Employer Identification No.)
of incorporation)
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102 South Main Street
P. O. Box 71
Culpeper, Virginia 22701-0071
(540) 825-4800
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
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JEFFREY W. FARRAR
Senior Vice President and Chief Financial Officer
Second National Financial Corporation
102 South Main Street
P. O. Box 71
Culpeper, Virginia 22701-0071
(540) 825-4800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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(Former name or former, if changed since last report.)
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Item 5. Other Events.
The Registrant recently announced an affiliation with Virginia
Heartland Bank. Effective April 18, 1998, the Company entered into a definitive
agreement of reorganization (the "Agreement") with Virginia Heartland Bank, a
Virginia corporation and state chartered bank ("VHB"). The Agreement provides
that the Registrant will be the continuing entity under a new name and that VHB
will be merged with and into a wholly-owned interim banking institution
subsidiary to be formed by the Registrant. The Registrant will act as the
holding company for both VHB and the Registrant's current bank subsidiary,
Second Bank & Trust. As a result of the effectiveness of the transaction, every
share of the Registrant's common stock outstanding on the effective date will
continue to be outstanding and each share of VHB common stock will be converted
into 1.15 shares of common stock of the Registrant. This reorganization is
expected to be completed before the end of 1998, barring unforeseen
circumstances.
Under the terms of the Agreement, the board of directors of
the Registrant will be composed of eight persons, five designated by the
Registrant and three designated by VHB.
Consummation of the reorganization is subject to approval of
the shareholders of the Registrant and VHB at special shareholders' meetings
called for that purpose, review and approval by the Federal Reserve, the Bureau
of Financial Institutions of the Virginia State Corporation Commission, and
possibly the FDIC, and other terms and conditions set forth in the Agreement.
The Registrant and VHB intend to mail proxy materials to shareholders and file
applications with the appropriate regulatory authorities as soon as practicable.
The Registrant's common stock is listed on the NASDAQ SmallCap Market under
the symbol "SEFC".
A copy of a press release provided to the local newspapers is attached as
an exhibit and incorporated herein by reference.
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SECOND NATIONAL FINANCIAL CORPORATION
Date: April 24, 1998 By: /s/ Jeffrey W. Farrar
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Jeffrey W. Farrar
Senior Vice President and
Chief Financial Officer
EXHIBIT 99
PRESS RELEASE
SECOND NATIONAL FINANCIAL CORPORATION
VIRGINIA HEARTLAND BANK
For more information contact:
Ed Barham, President and CEO William B. Young, Chairman & CEO
540/825-4800 540/898-1110
FOR IMMEDIATE RELEASE April 20, 1998
Second National Financial Corporation and Virginia Heartland Bank
announce peer merger and the formation of
United Virginia Financial Corporation
Culpeper and Fredericksburg, Virginia--Second National Financial Corporation
(NASDAQ Small Cap: SEFC) and Virginia Heartland Bank today jointly announced
that they have entered into an agreement to combine their institutions under the
umbrella of a new bank holding company, United Virginia Financial Corporation.
Under the terms of the agreement, Second National Financial Corporation will be
renamed United Virginia Financial Corporation. Second National Financial
Corporation shares will automatically convert into shares of United Virginia
Financial Corporation without any action by Second National Financial's existing
shareholders. Simultaneously Virginia Heartland Bank shareholders will join the
new holding company and receive 1.15 shares of United Virginia Financial
Corporation stock for each share of Virginia Heartland Bank in a tax-free
exchange.
Subsequent to the merger, Second Bank & Trust, the bank subsidiary of
Second National Financial Corporation, and Virginia Heartland Bank will continue
operating under their respective existing managements with their current names
as wholly-owned subsidiaries of United Virginia Financial Corporation. Each bank
will be managed by its own board of directors. The management team of the parent
company, United Virginia Financial Corporation, which will be headquartered in
Culpeper, will include William Young, Chairman and Chief Executive Officer; Ed
Barham, President; Jeff Farrar, Senior Vice President and Chief Financial
Officer; and Ed Allison, Senior Vice President and Secretary. Mr. Young will
hold the position of Chairman and Chief Executive Officer of the new holding
company until December 2000 at which time Mr. Barham will assume both titles.
The board of directors of United Virginia Financial Corporation will be
comprised of Mr. Young, Mr. Barham and six additional members, four to be
nominated by Second National Financial Corporation and two, by Virginia
Heartland Bank.
In announcing the transaction, Bill Young, Chairman of the Board and
Chief Executive Officer of Virginia Heartland Bank, said "We couldn't be more
excited about this partnership. Virginia Heartland Bank will team up with Second
National, who we have known for many years as a high quality institution, and we
will become part of a larger organization with more than $330 million in assets
and $39 million in capital. With more resources at our disposal, we will be able
to remain technologically up to date and provide our customers in the
Fredericksburg market with a wider variety of services. The combined companies
will have in excess of 2 million shares outstanding in the hands of
approximately two thousand shareholders. Virginia Heartland shareholders should
enjoy an immediate improvement in the liquidity of their investment."
Ed Barham, President and Chief Executive Officer of Second National
Financial Corporation, said "We share a common vision with Virginia Heartland
Bank. We both believe there is a continuing need for services that only
community banks can effectively deliver, but we also know this must be done
efficiently to satisfy the requirements of our shareholders. The larger United
Virginia Financial Corporation will do both by combining the resources of the
two organizations while each bank continues giving its customers top quality,
personalized service. Each bank's customers will see no change in personnel or
day to day operations. And financially, the transaction will be good for our
shareholders. It will be accretive to our earnings per share in 1999, the first
full year of combined operations, with very conservative cost savings
assumptions."
Both Young and Barham state "This combination will be successful
because both organizations believe strongly in the underlying principles that
are motivating it. We both understand the competitiveness in the financial
services industry today and the advantages of size in delivering those services
competitively. At the same time, we know there is a substantial segment of bank
customers who can only get the level of service they demand at their local
community bank. It is because of the combination of these forces that we
anticipate a great future for community banking organizations like United
Virginia Financial Corporation."
Second National Financial Corporation, which reported assets of $228
million and stockholders' equity of $29.4 million as of March 31, 1998, operates
six offices in the Culpeper, Madison, Orange, and Rockingham Counties. Virginia
Heartland Bank, with assets of $100 million and stockholders' equity of $9.1
million, has three banking offices in the city of Fredericksburg and
Spotsylvania County.
